The US vs Japan: Canada is caught in a high-stakes trade tug-of-war

本站添加: 2026-05-10

[00:00:00]resuming its study of Canada's trade with Japan.

[00:00:04]We have [snorts] with us today from the BC Council of Forest Industry, Kurt Niquidet, Vice President and Chief Economist by video conference.

[00:00:12]And from the Canadian Pork Council, Stephen Heckbert and Renee Roy um that are regular members at this point uh to our committee.

[00:00:21]And from the Canola Council of Canada, Chris Davison, President and Chief Executive Officer, also by video conference.

[00:00:29]Uh Mr. Niquidet, I turn the floor over for you for up to 5 minutes, please.

[00:00:36]Thank you uh Madam Chair uh and members of the committee. I am Kurt Niquidet, uh Vice President of the BC Council of Forest Industries, representing forest products manufacturers from British Columbia.

[00:00:49]Uh Japan is one of BC's most important non-US uh markets for forest products.

[00:00:54]In in 2025, we exported about a billion dollars of products, including softwood lumber, pulp, and wood pellets.

[00:01:05]This is a market we've built for decades through sustained technical um engagement, product and adaptation, and in-market presence.

[00:01:18]It is a premium market.

[00:01:20]Uh Canadian lumber achieves significantly higher prices uh in Japan than the United States.

[00:01:29]Canadian suppliers hold roughly 65% of Japan's 2x4 housing market.

[00:01:37]BC mills are specifically configured for this market, including metric sizing, appearance-grade products, and there are long-standing relationships with customers in Japan.

[00:01:48]At the same time, Japan is not a growth engine.

[00:01:51]The market is constrained by declining housing demand uh as a result of demographics, rising domestic supply, increased competition from Europe, and tightening technical and sustainability standards.

[00:02:07]For BC producers already facing high fiber costs and supply constraints, maintaining share requires continuous investment and engagement. Even with decades of success in Japan, approximately 75% of BC's lumber exports still go to the United States.

[00:02:26]There is no realistic scenario where Indo-Pacific markets replace the scale of the US market. Diversification strengthens resilience, but it cannot substitute for stable and predictable access to the United States.

[00:02:42]From a policy perspective, uh four priorities uh stand out.

[00:02:47]First, uh sustain and expand funding for Canada the the Canada Wood program.

[00:02:54]Second, invest in technical engagement, including standards alignment, testing, and building innovation.

[00:03:02]Third, recognize forestry as a core sector within Canada's Indo-Pacific strategy.

[00:03:08]And fourth, continue coordinated federal, provincial, and industry trade engagement.

[00:03:14]In closing, Japan demonstrates that BC and Canada can compete successfully in high-value global markets, but diversification is not a substitute for stable access to our primary market.

[00:03:26]Thank you. I look forward to your questions.

[00:03:29]Thank you very much. Uh on to Mr. Hickbert, please.

[00:03:33]It'll be It'll be Mr. Roy who will uh have her opening statement.

[00:03:37]Okay, Mr. Roy, you have the floor, please.

[00:03:41]Bonjour, Madame la Présidente et membres du comité.

[00:03:45]Madam Chair, members of the committee, thank you for the invitation to join you today on this topic.

[00:03:51]My name is Renée Roy. I am a pork producer from the Beauce region of Quebec.

[00:03:55]I have the privilege of serving as a chair of the Canadian Pork Council.

[00:04:00]Joining me with you is Stephen Heckbert, our CEO.

[00:04:05]Today, we will discuss a fundamental relationship for our trade prosperity, Japan.

[00:04:15]For the Canadian pork industry, Japan is not just a buyer.

[00:04:20]It is a premier strategic partner.

[00:04:24]And Japan is not new. It has been built over more than 50 years of rigor.

[00:04:31]Since 19 the 1970s, Canada has consistently met the extremely high quality standard of Japanese consumers.

[00:04:40]Today, the statistics speaks for themselves. Canada is our second largest export market by value.

[00:04:47]In 2025, Canadian pork exports to Japan exceeded 1.5 billion, and the gap with the our largest market, the United States, is very narrow.

[00:05:02]What is particularly notable is is Japan's preference for chilled fresh pork, a high-value segment where Canada holds a dominant market share.

[00:05:12]Nearly half of all fresh pork imported into Japan comes from our farm in Canada.

[00:05:19]Beyond the numbers, we must understand the geopolitical significance of these exchanges.

[00:05:25]In today's global context, agrifood trade has become an instrument of national security and sovereignty.

[00:05:33]By provid- providing Japan and its citizen with a stable, healthy, and high-quality protein, Canada strengthens its diplomatic ties with one of the world's most influential economies.

[00:05:46]This interdependence creates a solid alliance within the Indo-Pacific region.

[00:05:53]A Canada that exports is processed its processed resource on a large scale is a Canada that projects influence.

[00:06:03]Every ton of pork shipped to Tokyo is a pledge of stability with our bilateral relations.

[00:06:11]It demonstrates that Canada is a reliable partner even when global supply chains falter.

[00:06:19]This reliability bolsters our diplomatic weight and by extension our sovereignty on the global stage.

[00:06:27]Madam Chair, to to maintain this global reach, we must take a closer look at what is happening here at home.

[00:06:34]For pork from both or the prairies to end up on a Japanese plate, it must pass through our processing plant. It is imperative that we recognize the strategic importance of developing and supporting a strong meat processing industry in Canada.

[00:06:53]Why? Because these companies are the ones turning our raw commodity into a value-added product.

[00:07:00]They create thousands of local job, but more importantly, they allow us to brand our product.

[00:07:07]It is through our local processing capacity that we can provide the specific cuts demanded by the Japanese market, creating a unique Canadian signature.

[00:07:17]Without robust domestic processing, we would merely exporting commodities.

[00:07:23]With it, we are exporting Canadian excellence.

[00:07:28]This added value is what makes Canadian agri-food products shine across the world.

[00:07:35]This does not mean that there are no challenges.

[00:07:38]One concern we hear repeatedly from our international partners is the need for reliability in our ports. So, we urge this community to work with our ports to find long-term solutions to our labor challenges. Our international market who rely on our products needs to know they can do so.

[00:08:01]With that said, the Japanese market is the perfect example of Canadian trade success. A historical relationship based on the quality and mutual trust.

[00:08:13]To protect this success and strengthen our national security, we must continue to diversify our market while investing heavily in our domestic processing capacity and our infrastructure.

[00:08:26]This is how we will ensure the sustainability of our farms and the strength of our economy.

[00:08:34]Merci.

[00:08:35]Thank you and I look forward to your questions.

[00:08:39]Thank you very much, uh, Mr. Davidson.

[00:08:41]Please, for up to 5 minutes.

[00:08:44]Thank you.

[00:08:46]Chair Skrow, members of the committee, thank you very much for the invitation to join you today.

[00:08:51]My name is Chris Davison and I'm the President Chief Executive Officer of the Canola Council of Canada.

[00:08:56]The Canola Council is a national value chain organization representing approximately 40,000 Canola farmers together with the rest of the value chain which includes exporters, processors, and life sciences companies.

[00:09:08]As a value chain organization, our goal is to ensure the industry's continued growth and success and to do this by meeting domestic and global demand for Canola and Canola based products, namely Canola seed, oil, and meal.

[00:09:23]Our industry represents 43.7 billion dollars in direct, indirect, and induced economic activity annually, supports over 200,000 jobs across the country, and some 16 billion dollars in West Canola also represents one of the largest sources of farm cash receipts in the country.

[00:09:43]International trade is vital to the success of the industry.

[00:09:47]The vast majority of canola products are destined for international markets with export value totaling $12.6 billion in 2025.

[00:09:56]Japan is a valued customer of Canadian canola accounting for 10% of the aforementioned total export value in 2025.

[00:10:05]More specifically, in 2025 Japan imported 1.7 million metric tons of Canadian canola seed representing approximately 23% of all Canadian canola seed exports that year.

[00:10:17]Total export value of canola and canola products to Japan in 2025 was $1.3 billion 1.2 billion of which was canola seed together with a smaller quantity of canola oil.

[00:10:30]Japan's use of vegetable oils for food uses is very significant representing almost 2 million metric tons in 2025.

[00:10:39]Current calendar year exports to Japan of Canadian canola seed through February are just over 250,000 metric tons and for the crop year starting last August, those exports are just shy of 900,000 metric tons through February.

[00:10:54]Japan is a consistent and long-standing customer of Canadian canola with export volumes ranging from just over 1 million metric tons to 2.3 million metric tons annually over the course of the last 10 years.

[00:11:07]This trade relationship is supported by extensive and ongoing industry to industry engagement between Canadian exporters and Japanese importers, buyers, and processors.

[00:11:17]There is also a long-standing bilateral canola consultative mechanism originally established between the Canadian and Japanese governments and now operated by Canadian and Japanese industry with the participation and support of both governments.

[00:11:31]As part of this consultative mechanism, there are meetings each year where representatives of the Canadian and Japanese industry come together with the participation of government representatives and other select stakeholders.

[00:11:43]In fact, this year represents the 50th year of these consultations, making it the longest-running and ongoing bilateral canola trading relationship.

[00:11:52]These meetings are characterized by discussion and information sharing on a range of canola-related topics, including food security, production of canola, supply and demand, quality, sustainability, and transportation among them.

[00:12:07]By way of summary and conclusion, the Canada-Japan canola trade is a very important relationship with Canada as a world leader in canola production and exports, and Japan, a valued customer that relies on imports to meet approximately 60% of its overall food security needs.

[00:12:24]Canadian canola has and will continue to work to play an important part in meeting those needs. Thank you for the opportunity to join you today, and I look forward to the discussion that follows.

[00:12:35]Thank you very much. Uh I neglected to mention to the committee members uh that the UK got royal assent, that agreement that the committee did extensive work on, and the Indonesia uh is passed as well. So, that's the great work that this committee does. So, I just wanted to I just wanted to recognize the the great work that the International Trade Committee does, and to thank all the members for the extensive cooperation that they showed in the work It came out better as a result of us working together. So, thank you to all. Okay, Mr. McKenzie, 6 minutes, please.

[00:13:10]Uh thank you, Madam Chair. Uh if I could uh I would start to Mr. Davison um by asking you to put the into context the exports that Canada has in the canola uh area to Japan in in the context of our overall canola exports, are major trading partners.

[00:13:31]Uh sorry, I think you may be muted.

[00:13:36]There we go. Thanks very much. Thanks very much for for the question. Um yeah, a couple of comments I can make about that.

[00:13:43]Um as I mentioned in my opening remarks, the overall export value of Canadian canola in 2025 was 12.6 uh billion dollars.

[00:13:54]Um Japan represented 10% of that in terms of economic value and in terms of the proportion of seed exports, it represented 23% um of seed exports in 2025.

[00:14:08]Uh Japan is a consistent top five customer for Canadian canola and canola products together with the United States, China, the European Union, and Mexico. There are a number of other markets that are of significant interest and value to Canadian uh canola, um many of which you'll be familiar with the UAE, Bangladesh, South Korea, Pakistan, Chile, uh etc. But uh just to come back to the main point, Japan is a consistent and long-term top five customer for Canadian canola. Thank you.

[00:14:42]And our major export markets are the US and China?

[00:14:47]They are the top two markets and together certainly in the context of 2025, those were the the those are consistently the top two and as I said, the EU, Japan, and Mexico round out the top five.

[00:15:01]So most of if not everyone listening to this conversation today will be familiar with the events with respect to China's restriction on imports, their their tariffing position on Canadian canola as part of let's say aggressive trade negotiations to try and put it somewhat gently.

[00:15:20]Were the other markets including markets like Japan, able to take up the slack created by the reduction in the Chinese market?

[00:15:29]Yeah, certainly we saw there were a number of factors that came together when we when we all we're always looking at a combination of market dynamics and certainly when our number two market in the case of China was effectively closed to us, that certainly has a ripple effect throughout the industry and you sort of see a reordering of the trade that takes place, which is typically a function of a number of factors. Obviously supply and demand, with that the relationship to price in that regard, what our competitors are doing, whether they're having strong production or not. Uh, so we were very pleased to see a number of other markets step up in terms of the volumes that they were taking of Canadian canola and canola products, but I will just say collectively we're very grateful for that, but in terms of the the total volume and value represented by our top two markets cannot be made up by the other markets collectively.

[00:16:23]China's position on tariffs on canola was a temporary reduction.

[00:16:30]What do you anticipate or what are you concerned about going forward for the year ahead?

[00:16:35]Well, maybe just a clarification. What we saw there was two sets of tariffs that were in place. One the result of an anti-dumping investigation and we got a final determination on that not that long ago that saw final determination of 5.9% which was added to previous 9% MFN tariffs for a rate of 14.9%.

[00:16:57]There is no time limit on that particular set of tariffs. There was a second set of tariffs as a result of an anti-discrimination investigation with the result that tariffs on canola meal which were 100% are suspended as of now, so they're at 0% and that runs through December 31st, 2026.

[00:17:17]Those same tariffs remain in place for canola oil. So obviously we will be looking to see what arrangements can be put in place to provide ongoing trade and a measure of predictability and stability for the Canadian industry beyond December 31st 2026.

[00:17:35]So uncertainty as of now but a work in progress, is that fair?

[00:17:40]That's fair.

[00:17:41]Thank you.

[00:17:42]Mr. Raw, I think you mentioned domestic infrastructure as a necessary support for your industry's export capability. Do you have a wish list that the federal government can consider in improving our domestic capacity to support your industry's exports?

[00:18:02]Yes, we do have one. First the the question of of railroads. We know that we don't have a lot that are crossing our country and when one is blocked it becomes a huge limitation to our exportation and the fact that our products are mainly fresh, it means that they have to be delivered on time and our consumers on the other side of the Pacific ocean do expect these products also on time. So our reliability is extremely disadvantaged if we are not able to provide this. The other one is on the on the labor side. Making sure that we we are able to find solutions to labor dispute rapidly and that does not jeopardize our trade.

[00:18:55]So prioritizing continuity of service when it comes to transportation as a as a matter of national importance would be one way to address that. Obviously labor negotiations and discussions have to happen but if they happen at the same time we maintain continuity of service that would be preferable for your industry. Could I have a brief answer, please?

[00:19:18]Yes. Thank you.

[00:19:20]>> [laughter] >> Mr. Lavoy, please. He's all Mr. Roy always knows how to give that short answer. Thank you. Mr. Lavoy, please for um 6 minutes. Merci Madame la Présidente.

[00:19:32]Merci à nos témoins. Thank you, Chair.

[00:19:33]Thank you to our witnesses.

[00:19:35]We're really happy to have you here this morning. First question, Mr. Nikiday, am I pronouncing your name correctly?

[00:19:45]C'est exact.

[00:19:49]It's very interesting to hear about your exports We heard from someone in charge of the port in Vancouver. This is my question.

[00:20:03]Are transport infrastructure installations up to snuff? Would anything help your exports for softwood lumber or for anything else? Is that one of your requests to improve infrastructure to improve our exports?

[00:20:23]I think uh certainly the reliability issue. I mean, when we when we had the port strikes in Vancouver, we heard from our Japanese customers there was a lot of concern about reliability. So, that has been of concern. Um certainly improving infrastructure is always welcome. Uh one of the other main issues though is related to rail, reliability of rail. Uh and just the cost of rail transport over time, we've seen a 40% increase in our uh cost of our rail transport. So, those it's really about the reliability um and but we would certainly welcome any improvements to port infrastructure.

[00:21:07]Avez-vous un exemple concret de de?

[00:21:09]C'est you worried about reliability?

[00:21:11]We're talking about reliability, but can you give us one concrete example so we can properly understand what you mean by reliability?

[00:21:18]Well, it's really related to the the port strikes and that have occurred over the last you know, we've had a a number of them over the last few years and so that it really disrupted our ability to reliably supply our Japanese customers and that's paramount for them and so as a result we did lose some market share where they pivoted to European suppliers because there was concerns about reliability.

[00:21:46]And that reliability also relates not just to port infrastructure, but it also relates to our ability to access timber supplies reliability as well.

[00:22:03]Question for Mr. Davidson now.

[00:22:09]You talked about 40,000 producers throughout Canada. That's quite a lot.

[00:22:13]There must be many small businesses throughout Canada as well.

[00:22:20]Two questions. First, what federal measure could help small businesses to improve their exports towards Japan?

[00:22:32]Could we do anything at the federal level?

[00:22:36]Thank you for the question.

[00:22:38]>> [clears throat] >> I think there's always things we can do to improve, but as I said in my opening remarks, I'm also very grateful for the 50-year plus bilateral canola trading relationship that we've established with Japan.

[00:22:55]It's something that consists of a lot of engagement between the industry in Canada and the industry in Japan to facilitate uh uh smooth bilateral trade. Uh when there are issues that come up, um you know, we work uh either directly with the industry in Japan or with the Canadian and Japanese governments if there is any technical issues to to work to address them.

[00:23:21]Um and certainly our Japanese customers, um as I said in my opening remarks, when we meet with them, we talk about a range of different issues uh uh of of mutual interest. Um whether that's food security, uh the production of canola, how it's produced here, the practices that our Canadian farmers use to produce the product that Japan wants, uh discussions around quality, uh and other topics. And so, uh we're we're working to address issues on an ongoing basis to meet the needs of our Japanese customers.

[00:23:56]>> [snorts] >> Just one measure concrete.

[00:24:01]Can you give us one concrete measure? I I'm hearing that there's a lot that you would like. Can you give us an example of one concrete measure that could help you?

[00:24:11]Well, I'll pick up on the the answers uh from my my colleague on the panel in the forestry sector. There's two things that we have to do uh as a Canadian canola industry. We have to have a reliable supply for our customers, so that comes down to the the product that we're producing uh and the quality of that product. The other part of that is being a reliable supplier. Uh and like my colleague in the forestry sector, uh we have run into issues in the past on on the transportation side of the equation. So, part of the discussion we have with our Japanese colleagues among others has to do with railways, rail rates, our capacity uh to get the product uh from farms and elevators to the port in Vancouver and loaded on vessels in a timely fashion. We tend to have peak periods of activity. A good example of that would be uh immediately post harvest. So, if you're looking late September October through to the February period, and typically we run into uh other issues uh related to rail availability and and performance being one of them. Those can be affected by a number of factors including extreme weather conditions. When that happens, our product is not moving in as uh timely a fashion as we would like to get to port uh to get to our customer in time. So, uh things that are happening in that space, and I know there's some work being done by the federal government in that regard right now.

[00:25:31]Improvements in that area would be very welcome. Thank you very much. Mr. Serval Tremblay for 6 minutes, please.

[00:25:39]Yes, Madame la Présidente. Thank you, Chair. Thank you to all of our witnesses for being here today as well as their presentations. Mr. Roy, we know, first off, Japan has a spread particular relationship with our pork, especially Quebec pork.

[00:25:58]Why is Quebec pork so highly valued in Japan?

[00:26:04]It's because we developed the fresh chilled pork market that was mostly developed in Quebec.

[00:26:13]Quebec was the pioneer in Canada in developing pork that's not frozen.

[00:26:18]And that surplus value created a very close link between the two countries.

[00:26:25]Question.

[00:26:26]What's the next step? This isn't a trick question.

[00:26:31]Maybe you don't know about when tariffs will end, but as you know, exports towards Japan have increased by over 25%.

[00:26:39]Those going towards the US are going down for obvious reasons.

[00:26:44]Is there a strategy to keep up that momentum in Japan while waiting for the situation in the US to improve?

[00:26:53]Or are you planning on diversifying?

[00:26:58]Or are you working more in the short-term? According to what happens, you'll just in consequence answer.

[00:27:05]We can't put all of our pigs in the same basket.

[00:27:10]Some of our exports will go to Asia. It and the United States is an important market and our number one market is the Canadian market. And we must remember that because there's a considerable amount of imports.

[00:27:24]And we have to take care of our domestic market as well. And now I'll turn it over to my colleague. Yes.

[00:27:33]Diversification is really base is really fundamental for us.

[00:27:39]We find that there opportunities worldwide, especially in Southeast Asia.

[00:27:46]In our opinion, we ought not seek out only one market and seek to grow only one market. For us, our long-term strategic plan is to grow all markets at the same time. The Japanese market is growing good.

[00:28:05]With changes that happen for all countries worldwide.

[00:28:11]We would be able to increase our exports in Japan in parallel with growing our exports to Mexico, for instance.

[00:28:22]Which is also a relevant a relevant trading partner.

[00:28:27]So, we're always planning. We're always planning on growing our exports.

[00:28:33]In other words, we're not putting all our pigs in the same basket. We're seeing where possibilities are possible, but at a certain point you have to make choices. You don't have infinite production capacity. And now you're exporting less towards the United States. I understand that you're taking opportunities as they arise.

[00:28:56]But infinite growth is not possible.

[00:29:00]So, what would you do?

[00:29:02]Answer. Absolutely.

[00:29:04]And it's important to take care of surplus value. When we can have surplus value, we need to take those opportunities.

[00:29:15]Yes, we're exporting towards the United States, but we also need to be able to take care of our markets. And a really key point is to have that ability is research and processing in Canada. We can see other industries that cannot process their raw materials in Canada. It's a really serious issue.

[00:29:39]Japan is has a good reputation.

[00:29:43]We heard from other meat exporters to Japan, but Japan is generally well known for its very strict regulation.

[00:29:53]Regulations. There's really a Japanese way of making meat cuts. Last week we heard about beef. Wagyu beef is a Japanese specialty in your case.

[00:30:06]And Japanese food has a lot of pork. It doesn't seem to be an issue for you.

[00:30:11]Exports are still going up.

[00:30:16]This year Canada was the biggest pork producer to Japan.

[00:30:22]Please speak to that. We developed a very specific market.

[00:30:27]We developed our {quote} Wagyu pork for the Japanese. So, we make specific cuts for the Japanese market.

[00:30:40]And by default, that's the most rigorous market in the world. So, when we So, when we can please the Japanese, we can please any market.

[00:30:52]If I may, we also made direct investments in the Japanese market. We hired, we created an office in Japan for Canada pork. We are on the ground to sell the Canadian quality of pork, and we're always speaking with our Canadian our rather Japanese Japanese buyers.

[00:31:12]So, that was really something that made sure we had that presence in the market, and we were able to meet that demand.

[00:31:23]seconds remaining Well, 18 seconds.

[00:31:32]Yes or no?

[00:31:34]Beyond the expertise, all the aspects of certification, traceability, red tape, bureaucracy, the regulation aspect, is that an issue for you?

[00:31:45]You can just say yes or no, or we'll keep it for the next round.

[00:31:51]Uh the there can't be too much red tape.

[00:31:55]Okay, thank you very much, Mr. Mantle.

[00:31:57]Please for 5 minutes.

[00:32:00]Thank you, Madam Chair. Thank you to our witnesses for appearing and providing their valuable testimony this morning.

[00:32:06]Uh Mr. Nikkelen, if I've pronounced your name correctly, I hope. Um a few questions uh to begin with for you.

[00:32:13]Could you tell me um what the largest market is for Canadian lumber?

[00:32:20]Yeah, the the largest market is uh is the United States. Uh for uh just thinking at a Canada level, about 85% of our exports are destined to the US. For British Columbia, it's about 75%.

[00:32:34]Uh Uh, we're we're the most diversified Um, just given our, um, position on on the West Coast and, um, so, uh, and in terms of, uh, the second largest, uh, markets, that's really those Asia Pacific markets, Japan and China.

[00:32:51]Um, just to clarify your comment, so about 85% nationally, 70% of BC.

[00:32:57]Where where does Japan fit into that mix? Are they 5%, 10%, somewhere else?

[00:33:04]Yeah, it's about, uh, for on a national basis, I think it's around 5%, uh, but for British Columbia, it would be higher, up around 10% by value. Okay, so the US is still by far and away the most important market for the industry.

[00:33:18]Absolutely. Could you give us, um, your review or update on what the current status is of our disputes there with the United States and what your understanding of the Canadian government's actions in that respect are?

[00:33:32]Sure. I mean, we the currently we're facing about 35%, uh, combined anti-dumping and countervailing duties.

[00:33:40]Uh, and then we on top of that, we have, uh, a section 232 tariff of 10%. So, uh, we're at 45% uh, overall. And that's really has had a significant impact on our exports. Uh, I think our exports year-over-year have declined by about 20%.

[00:33:59]And so, we have been, uh, engaging with the federal government, um, and saying that, you know, the forest sector needs to be a priority in their engagements, uh, with the US as, uh, part of the the negotiations and the CUSMA review.

[00:34:15]Do you believe or do you feel that the government has made you a priority in that review?

[00:34:22]We we do now. Uh, there was concerns there where, um, uh, last year where we did feel like, uh, some of the other sectors were getting, uh, more attention, steel and aluminum, but um, um I think we we we really spoke up about our concerns there and we we have seen a change in the federal government.

[00:34:42]That's good to hear. Um you're probably aware the government recently referred a a wood product safeguard inquiry to the Canadian International Trade Tribunal. I wanted to ask you when the steel and aluminum industry asked for protective measures, they received them by order in council almost immediately.

[00:35:01]When the lumber industry asked for protective measures, they received a referral to the CITT for a legal process. Why do you think the government is treating lumber and lumber products differently from steel and aluminum?

[00:35:18]I really don't have an answer for that.

[00:35:20]I'm not aware of the specifics around that issue. So that I can't comment.

[00:35:28]Do you think it's fair to the lumber and lumber consuming industries um that they have to go through a legal process whereas other industries essentially received exactly what they asked for in terms of protective measures?

[00:35:43]Again, I I can't comment specifically on that that instance, but I think certainly having a process is is fine and and so but I I can't comment on the specifics of that. Fair enough.

[00:35:59]Um where where in the industry do you see the most vulnerability right now? I mean we've we've been we've read about mill closures especially in BC. Um but where where's the next domino that we should be worried about?

[00:36:14]Well, I think you know, it's important to note that the forest industry is very integrated. So when you see a sawmills go down, that means there's less byproducts, residual chips.

[00:36:28]Um and so the pulp mills can also be um affected. And so that's a real concern is that you start to see those ripple effects throughout the supply chain. Uh and so that could be pulp mills. I also mentioned, you know, one of the emerging products has been wood pellets that we've been sending to Japan. So wood pellets producers could be affected. So it's those ripple effects throughout the sector because it's it's so integrated.

[00:36:55]I know I just have a few seconds. So just just to so I understand your answer, you're concerned about pulp mills and wood pellet producers. Those are ones we should be we should be keeping an eye on.

[00:37:06]Absolutely. I mean, you're and also concerned about sawmills as well, but uh it is an integrated sector. So it um the pulp mills and the wood pellet plants could be affected as well. Okay. Thank you very much. Madam Lapointe, please for 5 minutes.

[00:37:22]Thank you very much, Chair, and thank you to our witnesses for coming. It's always so interesting to have your perspectives, especially given what we're looking into at the time being.

[00:37:30]Mr. Roy, I have a few questions for you regarding pork.

[00:37:34]Very specific questions. We export our fresh chilled pork.

[00:37:42]There are slaughterhouses.

[00:37:46]When you say it's fresh, you send it by train, I imagine. How much time do you have between slaughtering the animal, cutting the meat, and sending it to the client? Give us a product timeline.

[00:38:03]Stephen, I'm drawing a blank. Do you know?

[00:38:09]Yes.

[00:38:10]We freeze Freeze it between 1° and 1 and 1/2° C.

[00:38:18]So it's close to being frozen, but it's still fresh.

[00:38:26]We have 40 to 45 days of from slaughter to market.

[00:38:33]Transport is clearly a a fairly long period.

[00:38:38]Most of that transport takes place on a boat.

[00:38:44]So, it's still fresh pork when it gets to Japan.

[00:38:49]Thank you.

[00:38:50]40 days between slaughter to market at 1 to 1 and 1/2 degrees.

[00:39:00]And moving through Canada to get to the port of Vancouver, how much time does that take?

[00:39:06]Around 4 days. All right, 4 days.

[00:39:09]Earlier, you referred to the fact that if there were strikes or if there were issues with rail or ports, well, then do you need to take out insurance to make sure that you can respect the transport time?

[00:39:26]Last time that there was an issue of that kind, pork producers had to take a plane or find another solution.

[00:39:42]We tried to find an American solution to be assured that our pork suppliers were able to fulfill their obligations in Japan.

[00:39:53]Given that the strike ended fairly quickly, it was okay. Every time that happens, our buyers ask us every time, "Why is does that only happen in Canada?

[00:40:06]Why doesn't it happen in the United States?"

[00:40:14]And the effort it takes in an in an emergency in order to find another way to deliver the merchandise. It's very stressful.

[00:40:26]And it engenders many extra costs. It's not It's not a long-term strategy that works for our industry.

[00:40:34]Question: Do you go into a lot of debt?

[00:40:37]Answer: Yes, for our industry is about 10 million dollars of debt.

[00:40:45]Within 7 to 10 days last time there were significant losses on that front. Everything we sold in that market, we sold at a loss.

[00:40:55]All right, thank you.

[00:40:59]Let's get back to the possible increase between Canada and Japan.

[00:41:05]If it's a main partner for our pork, can we increase our part of the Japanese market? Yes. Yes.

[00:41:15]That's possible.

[00:41:18]Notably, given what's happening with the US, which is our main competitor in fresh meat.

[00:41:28]Consumers and buyers in Japan trust the United States less. So, that gives us an opportunity to keep on growing in that market.

[00:41:39]We built a very long-term relationship and managing to keep it That really counts for the Japanese.

[00:41:49]It's not a commodity market like any other. It's really based on relationships.

[00:41:55]You anticipated my next question.

[00:41:59]Which was, what are your main competitors? You said the United States.

[00:42:02]Are there any other major competitors in Japan?

[00:42:09]One One the markets that makes us nervous is the frozen market from Brazil.

[00:42:17]We have to be sure that we keep our production costs as low as possible to make sure that we're also competitive for frozen pork.

[00:42:30]It's a bit complicated, the economic situation in Japan, so now they're migrating towards frozen products, which are a bit cheaper.

[00:42:38]Merci beaucoup. Monsieur Savard, your turn, ready for 2 and 1/2 minutes.

[00:42:41]Merci.

[00:42:43]Thank you.

[00:42:45]Once again, for Mr. Heckbert and Mr. Roy.

[00:42:51]Quebec is the biggest pork producer in Canada, but it's only 22.7% of exports.

[00:43:01]Inversely, Manitoba's 46.6% despite the fact that it only represents 22% of Canadian production. Will Japan say would it be an opportunity for Quebec to increase its ratio or would other provinces win in that regard?

[00:43:32]You said Quebec was a pioneer for certain types of meat.

[00:43:38]That might really catch on in Japan.

[00:43:42]Please speak to that.

[00:43:48]Canadian processing plants adapted to their markets.

[00:43:56]Manitoban businesses concentrated on exports.

[00:44:02]Whereas in Quebec, there was an orientation towards the Canadian market. So, that explains that, but every time we managed to increase our surplus value, our value added, that's a really big margin and a lot of money we can bring back to Canada and to Quebec.

[00:44:24]So, yes.

[00:44:26]We will target growth and in Canada we do have the capacity for growth.

[00:44:31]Certainly, it's a big win for Quebec producers and the Quebec market requires a lot of or services the domestic market and it's not the same amount for exports, whereas Manitoba, given that it has a much smaller population, it doesn't have the same domestic market and that's why they target exports.

[00:44:58]So, you must keep on like that and it'll be good for farmers or rather for pork producers.

[00:45:06]How much time do I have? Uh Merci.

[00:45:09]>> Oh, well, I wouldn't have much time.

[00:45:10]Thank you.

[00:45:11]Mr. Chambers.

[00:45:15]Mr. Chambers, please.

[00:45:17]Mr. Mr. Davidson Mr. Davison, uh can you uh just help me understand? Has there ever been any, to your knowledge, has there ever been any threat of um tariffs on your members' goods from Japan?

[00:45:36]Uh in in terms of a a threat of new or different tariffs being imposed on Canadian canola and canola products in terms of bilateral trade between Canada and Japan? That's correct.

[00:45:47]>> That's That's correct. So, uh in your view, they're a a reliable trading partner, is that correct?

[00:45:55]Correct. Yes.

[00:45:57]And do you feel that um there are some countries in the world that are less reliable.

[00:46:06]Well, I think we're all very aware of the current geopolitical environment that we're all operating in across all industries and sectors.

[00:46:14]And so there are obviously for a variety of different reasons different markets or different countries that pose pose challenges. Yes, that's true. Right. So do you feel that your members in the sector have been or can be used not with not because of anything that your members do, but that you're feeling the consequences of kind of being stuck between two countries who might be arguing about nothing to do with your your goods?

[00:46:52]I think that's a risk for for many industries. So we've talked about that in the past and and sometimes you use the term of collateral damage in situations like that. And so obviously we're in the markets that we're in for good reason in terms of the Canadian canola industry. So what we want to do is make sure that the the markets that we have a bilateral relationship with are working as smoothly and effectively as efficiently as possible. And so that's our goal in that regard. That that that's right. I think the term you used collateral damage is probably exactly the words I was I was searching for.

[00:47:29]Uh since your industry is sometimes collateral damage in these disputes, do you think that you get enough transparency or information from the government when there are potential threats to your industry before they come?

[00:47:47]I think that has to be assessed on a case-by-case basis because it's it's rarely, if ever, clear where the threats are are to come from and when and how they're going to arise and with how much uh lead time. So, I think that's something that has to be considered on a case-by-case basis.

[00:48:06]Fair enough. Do you Do you think um Do you think we should strive to provide those industries with more information and transparency from the government when they might be facing a threat um unbeknownst to them and for nothing for for actions they had no hand in?

[00:48:27]Uh uh absolutely. I think anyone would want to get as much information as possible in advance of a potential threat to their industry. Sometimes that allows us to take preemptive action or attempt to seek redress on a particular issue depending on its origins and nature, but certainly the more we know before things happen, the better. Thank you very much. Mr. Niquette, uh when's the last time that your industry had a an agreement with softwood lumber?

[00:49:00]Yeah, the last agreement expired in 2015 in October of 2015.

[00:49:06]>> Okay. Um Thank Thank you very much. So, 2015.

[00:49:09]And And now I think your testimony is that you feel pretty confident that the government has your back. When do you expect that you'll have a softwood lumber agreement?

[00:49:18]It's It's difficult to predict. Um you know, they've uh you know, communicated to us that it's a priority in their engagement with the US, but you know, it takes two to tango, so I appreciate that. dependent on And with your the US and sort of I just limited time, would your preference be to get more loans from the government or to actually have an agreement with softwood lumber?

[00:49:40]I think our preference that the solution is to get a long-term agreement.

[00:49:46]>> [clears throat] >> Great. Hopefully we can expect that in an expeditious manner.

[00:49:52]You have 24 seconds left. Thank you very much. Before we go on to the next speaker, I see it's always nice to have visitors to committee and we have two very special young women that are visiting us today. So I just want to acknowledge that they're here and I expect they're Ms. Blaney's grandchildren that are visiting Ottawa today. So welcome to the International Trade Committee. Thank you.

[00:50:17]>> [applause] >> Okay, Ms. Aiken, please for 5 minutes.

[00:50:23]Thank you very much, Madam Chair.

[00:50:25]Mr. Nikuidet, British Columbia Minister Ravi Kahlon led one of BC's largest forestry mission in November with 61 delegates coming back with a signed agreement with the Japan 2 by 4 Home Builders Association and what he described powerful partnerships that protects jobs and open new markets. And coffee was a part of this mission.

[00:50:47]Beyond the signed agreements, how did this translate on the ground with Japanese buyers and builders? And what doors have opened that were not open before?

[00:51:00]Thank you for the question. I think it just sent a a signal. There was concerns around the reliability of our supply and so I think uh um there are existing relationships um but um you know, given some of the disruptions that we've had either to our timber supply or the port strikes I talked to earlier, there was concerns about the reliability of our supplies going forward. So I think it um you know, uh some existing relationships were sort of renewed as well as some some new relationships established.

[00:51:33]Thank you very much. That's good news.

[00:51:35]In addition to that, Minister Singh, who is leading a federal team Canada mission to Japan in June 2026 with forestry named as a priority sector.

[00:51:45]What should that mission be focused on for the lumber and wood product sector specifically? And what is the most important deliverable Coffee wants to see come out come out of this meeting?

[00:51:59]Yeah, I think there's a a couple things.

[00:52:01]There's sort of the existing market and uh, trying to we have lost uh, some market share in our existing market which has been focused on sort of more the residential side. Uh, but also um, uh, establishing uh, new markets and in more on the non-residential uh, side of things. And I think one of the key things we do have Canada Wood which is uh, an agency that um, Coffee funds and the and there's funding from the federal and provincial government that has offices in Japan.

[00:52:33]And it's important that uh, they're supported um, because really to establish uh, you know, um, these markets it takes it takes time.

[00:52:43]And uh, there's a lot of technical issues that need to be worked through in order to um, sort of uh, grow these markets and establish these markets. So I think uh, funding for Canada Wood and also uh, looking at some of the opportunities in the non-residential sector.

[00:53:00]Thank you very much for your input. Mr. Davison, Canada has a long been one of Japan's most reliable and significant suppliers of raw uh, canola seed. And with exports increasing by 30 39.3% in 2024-2025 compared to the previous year. However, most of the value-added processing that includes crushing, refining, and finished oil production continues to take place in Japan. As a result, the processing margins and many of these associated uh, jobs are being captured abroad rather than in provinces like Saskatchewan and Manitoba.

[00:53:36]Uh, what would it take for Canada to shift this dynamic and export more processed canola products rather than primary raw seeds.

[00:53:45]Yeah, thank you for the question. Um you're right we the statistics you reference reiterate the long-standing and and ongoing benefits of the canola trade between Canada and Japan.

[00:53:57]You're right Japan also has a domestic crush industry um which our canola seed supports through the export of Canadian canola seed to Japan.

[00:54:09]There are a number of different factors at at play at any any given time. Of course obviously like Canada Japan has domestic policy goals to support its own industries as we do here. That's certainly a factor. I think you look at market dynamics. You look at competitive product, the cost of bringing that product into the market. You look at the uniqueness of the um the food sector in Japan.

[00:54:35]And then there's also been TRQ tariff related elements to that in the past too where there have been some adjustments in the last few years.

[00:54:43]So I think that is something that we look at as as a more medium and longer term proposition than something that we see likely changing in the immediate short term.

[00:54:54]So in that change could you please elaborate on why this transition has not been already occurred? Like for example are there tariff or non-tariff structures that make importing raw seed more attractive to Japanese buyers than importing processed canola oil or other finished products?

[00:55:15]Yes, correct. And and so as I said they Japan has a well-established domestic crush industry that is supporting through the imports of certainly Canadian canola but also other oilseed products as well.

[00:55:28]And so that's what the key driver has has been in that regard.

[00:55:32]That gets factored into like I said uh, other considerations related to supply and demand price.

[00:55:39]What are they What are they sourcing from other competitive markets, whether that's in terms of canola or other oil seed products, soybeans, and the like.

[00:55:49]So, we have seen volumes of oil exports to Japan previously, but as I alluded to in my opening remarks, they are at significantly smaller volumes.

[00:56:02]Okay, thank you very much. Thank you to our witnesses for their excellent testimony today.

[00:56:08]We will now adjourn the meeting, and we will go into the informal part with witnesses from GAC. Thank you very much.

[00:56:15]I move adjournment.